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Tax audit

Shrividhya (CA Final Student) (74 Points)

20 August 2018

My clients turnover for the FY 2017-2018 is Rs. 95Lacs that is less than one crore. So whether tax audit is compulsory for him? he s maintaining proper books of accounts. if tax audit is not compulsory whether we need to show profit more than 8%? pls help

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8 Replies

Ruchika Somani (Coaching and Practice in Tax Audit Law.) (4429 Points)
Replied 20 August 2018

Yes, you need to show profit > 8% as per 44(AB)(b)

Tax audit is not compulsory if you show profit as above

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(Guest)

Tax audit is not compulsory but u need to show profit =>8% as per section 44(AB)(b)

CA Neelima Kotha (Consultant) (606 Points)
Replied 20 August 2018

Tax audit is not compulsory because turnover is less than 1crore.
But you need to show profit more than 8%, otherwise tax audit becomes applicable.

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CA P V N Varma (CA ) (609 Points)
Replied 20 August 2018

First of all, your are not liable for Tax audit since your turnover is less than rupees 1 Crore(Rs.50 lakhs for Professionals). if your client is an individual or HUF or Firm(other than LLP) and opted for Presumptive Taxation u/s 44AD you need to show at least 8% of total turnover as Business Income (if transactions made through other than cash it is 6%).If not opted for Presumptive Taxation No need to maintain these Percentage as profit... Presumptive Taxation U/s 44AD is available upto 2 crores turnover.. so even if your client having turnover of more than 1 Crore but opted for Presumptive Taxation no need to get Tax Audit U/s 44AB and no need to maintain Books of accounts. it is the Special exemption available for Sec 44AD..

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rama krishnan (12234 Points)
Replied 20 August 2018

yes.. you need to show 8% or 6% if turnover as total income

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FAHEEM AKRAM (293 Points)
Replied 21 August 2018

if any indvidual had previous year tax audit but now he has not exceeding 1 Crore Rs but his net profit % is 3.90% so what to do to skip tax audit for this year?